Your Right to Know

Those looking for a sign that state agencies will soon see relief from the punishing economic
downturn won’t find much to like in Gov. John Kasich’s latest budget move.

But those who have observed Kasich’s desire to hold the line on spending should not be surprised
that he has asked state agencies to start the next budget process with plans to spend no more than
what they are getting in fiscal year 2013, which starts on July 1.

“The governor is clear that we want to look at agency operations and try to restrain spending,”
said state Budget Director Tim Keen. “We want to look for program-improvement opportunities.”

The state Office of Budget and Management released its budget guidance this week for the budget
covering the 2014 and 2015 fiscal years. It asks that state agencies produce two proposals: one
spending 90 percent of what the agencies are getting in fiscal year 2013, and one spending 100
percent.

Agencies funded with money outside the general-revenue fund got a bit more flexibility.

The guidance is the first major step toward crafting the new two-year budget, which Kasich must
release by Feb. 4. It does not necessarily mean that no state agency will see a funding
increase.

“This is a starting point,” Keen said. “This is the slowest economic recovery in the post-World
War II era.”

Proposals that call for flat funding and a 10 percent cut will let the administration deal with
national and global uncertainties, and will encourage agencies to “identify what their priorities
are,” Keen said.

The new federal health-care law, if upheld by the Supreme Court, will make Medicaid a challenge
because the law would expand eligibility and bring onto the rolls thousands of Ohioans who are now
eligible but are not using the state-federal health-insurance program.

The state’s share of costs for currently eligible enrollees would be an estimated $370 million
in 2014 and $570 million in 2015.

Solid tax revenue, combined with Medicaid under-spending, means that the 2012 budget will end on
Saturday with a surplus, most of which will roll into the state’s rainy-day fund. The surplus
occurred even without a $500 million payment for future liquor profits from JobsOhio that was
delayed by a lawsuit.

Now, that $500 million is coming in the next fiscal year — when state leaders were not expecting
it. So what will they do with an extra half-billion dollars?

The money is likely to generate plenty of discussion.

“The administration’s general view is we need to build up our rainy-day-fund reserves,” Keen
said. Asked if there is a wish list of spending items, he added: “I think others around Capitol
Square are handling that.”